페이지 이미지
PDF
ePub

Mr. CHAMBERLAIN. The revolutionary thing about this section, and the others that assist and reinforce it, seems to me to be that hereafter no business of any consequence can be transacted by a corporation with any of its clients without a constant thought that at any time and under any circumstances, any papers or documents in the possession of these corporations may be public property.

Senator CUMMINS. But there is no substantial difference between this and the authority or jurisdiction that the Bureau of Corporations now has.

Senator ROBINSON. And has been exercising for a great many years.

Mr. CHAMBERLAIN. The Bureau of Corporations, with whose work I am not very familiar, has not been compelled to exercise its functions in the case of every corporation of the country.

Senator ROBINSON. This does not do so either.

Mr. CHAMBERLAIN. I think in subsequent sections, under certain conditions, it is obliged to, and business must stand stock still until the trade commission

Senator Cummins. These are powers of investigation and inquiry, and not powers subsequently given to the commission under certain circumstances. As far as the jurisdiction is concerned to inquire into the affairs of a corporation, the authority of the Bureau of Corporations is just as broad as is here given to the commission.

Mr. CHAMBERLAIN. May I ask you a question, Senator?
Senator CUMMINS. Certainly; yes.

Mr. CHAMBERLAIN. Has the Bureau of Corporations the power at the present time to inquire into the affairs of any corporation that is engaged in interstate commerce?

Senator CUMMINS. Yes; any corporation.
Mr. CHAMBERLAIN. Any corporation?

Senator CUMMINS. Yes. The same test exactly is applied to its jurisdiction as is applied here. It would have as effective power over the subject as is given here. The corporations which fall within its scope, as the same corporations exactly, that are brought within the scope of this commission.

Mr. CHAMBERLAIN. Not having in mind the text of the law under which the Bureau of Corporations operates, I can not discuss the matter with you.

Senator CỨMMINS. The text of that law is corporations engaged in commerce among the States, and so it is here.

Mr. CHAMBERLAIN. In paragraph F of this section, in my text, the sixth line of the paragraph

Senator CUMMINS. What is the line of the bill? You have got the line marked ?

Mr. CHAMBERLAIN. It is line 15, in my text. I will try to carry along the line number.

Senator CUMMINS. We have the same thing.

Mr. CHAMBERLAIN. In line 15, “ Refer the matter of the form of the decree to be entered to the commission ”-right there I would suggest the insertion of “or to the Interstate Commerce Commission as the case may be.”

Senator OLIVER. What page?
Mr. CHAMBERLAIN. Page 6 in my text.

[ocr errors]

а

Senator CUMMINS. The Interstate Commerce Commission is not there?

Mr. CHAMBERLAIN. I am merely offering an insertion, which will be submitted in this text that I shall offer you. Since this phraseology, as well as other pieces of phraseology for which I offer substitutes, occurs repeatedly throughout the various sections, the first time I meet each I wish to explain the purpose of the insertion.

The CHAIRMAN. Where is that insertion to be made ?

Mr. CHAMBERLAIN. After the word "commission,” in line 15, paragraph F, of section 3.

Senator CUMMINS. It simply brings the Interstate Commerce Commission in? Mr. CHAMBERLAIN. The insertion reads, or to the Interstate Com

is merce Commission, as the case may be.” In other words, just to define more clearly the functions of the trades commission and the Interstate Commerce Commission.

Senator CUMMINS. That omission is not unconscious. We had not intended to give to the Interstate Commerce Commission the power that is here given to the trades commission. We intended the trades commission—this commission should be the only body that should act as an aid to the courts in this case. We

may

be wrong about that, but it is not an unintentional omission.

Mr. CHAMBERLAIN. These are only suggestions of mine after conference with the different people, going back and forth from section to section, trying to make a logical situation, and in this case, as in most cases, our idea was merely to make a little clearer to the corporations that are obliged to obey the law the idea of what we thought this bill stood for.

I should like to explain to you a little more fully, by illustration, what I mean. In New York State we have recently had passed a private bankers' law which the private bankers want to obey, and are most earnestly trying now to obey. This law permits unincorporated private bankers to remain without the jurisdiction of the New York State banking department if they do not advertise to be a private bank, and the wording of the text is something like this, that they shall not have any exterior sign with the word “bank," “banker," etc., or any such words as would convey the idea that they do a general banking business. Now, to what extent does this idea of exterior signs go? Most of the bankers of New York have carried it to the point of removing signs from the hallways downstairs and of removing such words from the building directories, and stopping the use of the words in their advertising and on their stationery, and have informed the telephone and business directories, etc., to remove the word “banker" from their address.

This has meant a great deal of labor to many houses, just because the law is not sufficiently explicit to indicate with any degree of clearness and accuracy what is intended, and until we have departmental regulations or court decisions on this matter it means a good deal of discussion and argument and speculation among houses to find out what each is doing or should do.

Senator CUMMINS. What is the obscurity there! I did not catch your criticism. Are there any cases that have been brought against railroads for violation of the antitrust law where a decree is ordered

[ocr errors]

for the complainant in which any reference is made to the form of the decree that it should be to the Interstate Commerce Commission!

Mr. CHAMBERLAIN. I think this may answer your question:

Clause F authorizes the courts to refer the form of the antitrine decrees to the trade commission. This clause should provide for such reference" to the commission or the Interstate Commerce Commission as the case may be,” making it possible for the courts to refer to the Interstate Commerce Commission rather than to the trade commission matters relating to common carriers. This principle is followed in section 9 and the following sections.

Senator CUMMINS. Your criticism may be just; that is to say, it may be wise to refer cases affecting railroads to the Interstate Commerce Commission, but that would be a change in the substance. There is no obscurity about this, because the word "commission” found in section 3, paragraph F, means the trades commission. We have defined that word in the very first lines of the bill.

Mr. CHAMBERLAIN. I think it is quite likely

Senator CUMMINS. You will observe also, whether it be right or wrong, that this part of the bill—the bill you are referring to does not cover either common carriers or banks. These corporations are entirely excluded from the part of the bill we are now referring to, and does not come in until you get down to section 9. That may have escaped your attention.

Mr. CHAMBERLAIN. Now, in section 4, page 8, line 1, I had a sug. gestion of an insertion.

Senator CUMMINS. Before you state that, there is a clerical error in section 4, line 1, which should read," that the powers and jurisdiction hereinbefore conferred upon the commission." The word “herein” ought to be “hereinbefore."

Mr. CHAMBERLAIN. Well, at section 4, page 8, line 1, I had the suggestion of an insertion which would make the phrase read: “Except that the commission shall have no powers or jurisdiction in respect of banks and such common carriers,” etc. Senator Robinson. That is the same thing. That does not change

. the meaning.

Senator CUMMINS. The purpose of the bill is to give to the trades commission no investigating power over banks or common carriers.

Mr. CHAMBERLAIN. It was thought that by the insertion that I suggested

The CHAIRMAN. What was the insertion again?

Mr. CHAMBERLAIN. That the commission shall have no powers of jurisdiction in respect of banks and such common carriers. It was thought that the insertion suggested would make it plainer than now, and that this jurisdiction does not apply in the case of banks and common carriers.

Now, this suggestion, in not exactly these words, but in one form or another, has come to me from two separate sources, and that is why I have inserted it at this place. However, as I say, I shall leave the entire text with you, and if any of these meet with your approval, you will have the exact wording.

Senator ROBINSON. What is your next suggestion !

Mr. CHAMBERLAIN. The next suggestion is in section 9, dealing with interlocking directorates.

:

Senator La FOLLETTE. What page ?

Mr. CHAMBERLAIN. Beginning on page 9, and going over to the top of page of 10, line 4. The section reads:

That no corporation shall engage in commerce if, upon its board of directors or other managing board, or among its officers there is any person who is a member of the board of directors, or other managing board, or one of the officers of another corporation engaged in commerce and carrying on a competitive business.

Now, on the first reading of this bill, it struck me that this phrase "competitive business," as it stood, would be open to the same objection that the words “ exterior signs” were open to in the case of the New York State private banking law; that it immediately caused every corporation to wonder what was meant by “ competitive business," and would make the majority of corporations, and, perhaps, all of them, who had common directors petition the trade commission to have an interpretation of this expression in their own particular cases, and if it should happen as to the three hundred and odd thousand corporations, a large part of which have some community of directors, it would put, of course, upon the trade commission an impossible burden, and so I suggest this insertion after the word “business," in line 4.

The CHAIRMAN. What page?

Mr. CHAMBERLAIN. Page 10:“in case such community of directors or officers, or both, monopolizes or restrains trade as to such corporations."

On line 13, the phrase "does not destroy or impair substantially competitive conditions”-in the first place, I think the word “substantially” is slightly ambiguous. I presume it is a qualifying word applying to “competitive," but there may be a difference in opinion as to that. As to the whole phrase “ destroy or impair substantially competitive conditions," I offer as a substitute the phrase, which is, in one form or another, carried in the House bill," monopolize or restrain trade," and give as the chief reason for the substitution the fact that this phraseology is the phraseology of the Sherman Act, with its 24 years of judicial interpretation.

Furthermore, I am told, and have citations to the point, that the expression “ monopolize or restrain trade” accomplishes the result that I think you are after better than the expression as in this bill, and in this connection I should like to read the following with citations, which I can leave with your secretary, if you like.

“ Neither the possibility nor the actuality of elimination of competition' ought to be substituted for • restraint of trade,' as the test of illegality. The courts have expressly held that elimination of competition and restraint of interstate trade' are not interchangeable terms. There may be, under the antitrust act, restraint of competition that does not mean restraint of interstate trade.' (United States v. E. I. Du Pont de Nemours & Co., 188 Fed., 127, 151, and Supreme Court cases cited.) The courts have also held that the prohibition in the Sherman Act of restraint of trade' also prevents any menace to competition that might actually fall short of eliminating or lessening competition in any considerable degree. (See United States v. Northern Securities Co., 120 Fed., 721; 193 U. S., 197; U. S. v. Union Pacific Railroad Co., 188 Fed., 102; 226 U. S., 61; 226 U. S., 470). It is hard to understand why new, untried, and undefined

[ocr errors]

6

[ocr errors]

phraseology, which has been judicially declared to be inconsistent with the language of the Sherman Act, should now be substituted for phraseology which has attained definite meaning in the Sherman Act, as to 24 years of judicial interpretation, and which has repeatedly been held to be so comprehensive and thorough' as to prevent evasion of its policy? " by resort to any disguise or subterfuge in form, or the escape of its prohibition by any indirection' (Standard Sanitary Manufacturing Co. v. United States, 226 U. S., 20, 49), and to embrace every conceivable act which could possibly come within the spirit or purpose of the prohibitions of the law without regard to the garb in which such acts were clothed.' (U. S. v. American Tobacco Co., 221 U. S., 106, 181.)”

Senator CUMMINS. Mr. Chamberlain, if the committee adopted your suggestion, it would simply be reiterating the antitrust law, and there would be no need for this act.

Mr. CHAMBERLAIN. I can not say that, Senator, because this bill goes so far beyond the Sherman Antitrust Act. The point I wish to emphasize is that our major interest (apart from keeping these financial institutions in a sound condition) is to know where we stand.

Senator CUMMINS. If we adopt your suggestion, we would simply reenact the antitrust law which we now have, and there would be no necessity for it at all. This is intended to go beyond the antitrust law.

Mr. CHAMBERLAIN. I think that the suggestion that I have made would indicate that. Although the two phrases are not synonymous, the Sherman-Act phrase goes beyond the phrase "to eliminate competition."

Senator CUMMINS. Then your argument is not that we ought to amend this bill, but that we ought not to pass it at all; that there is no occasion for passing the law inasmuch as we are abundantly protected by the antitrust law?

Mr. CHAMBERLAIN. Well, I am going to suggest that there are certain portions of this bill that it would be well not to have at all, but I do not think it follows that I advocate that we should have no portion of the bill whatever, because you have gone, in very many instances here, far beyond the Sherman Act, in the powers that you confer on the trade commission, and it seems to me—but in illustration just let me refer you to the sections relating to interlocking directorates and the sections relating to holding company, etc.

Senator ROBINSON. As to interlocking directorates, under the law now, if they restrain trade or commerce or monopolize commerce, there is a violation of the law now.

Mr. CHAMBERLAIN. As I understand it; yes.

Senator ROBINSON. So, as suggested, to use the language you suggest would be to reinterate in a different form the constructions that have been placed by the courts on the Sherman law.

Mr. CHAMBERLAIN. Before I take up the general subject of the section, I have a further suggestion as to the text. On page 11, line 6—

If such finding of the commission or Interstate Commerce Commission be

I will substitute for "against," the word " that" the petitioning corporation

a

[ocr errors]
[blocks in formation]
« 이전계속 »